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Coronavirus: Nigerian ports to suffer decline in ship traffic, cargo volume in Q2

…As shipping lines, airlines cancel sailings, flights to China, others …Government revenue to drop as Italian national brings virus into Nigeria    

There are indications that Nigerian port industry would in the second quarter of the year, suffer decline in ship traffic as well as drop in the volume of imports coming into the country and exports originating from Nigeria to other countries, analysts have predicted.

According to them, this would be largely due to the aftermath of Coronavirus outbreak in China, United States of America, and India (Nigeria’s major import trading partners with 31.34 percent, 11.35 percent and 7.49 percent of the country’s total imports coming from these countries, according to the National Bureau of Statistics (NBS) third quarter report).

Given the decline in the volume of import and export cargoes, analysts also predicted that there would be corresponding drop in government revenue as Federal Government agencies such as Nigeria Customs Service (NCS) and other agencies that generate revenue from authorising these cargoes, would also lose out significantly.

Currently, Coronavirus, which originated from China, has gone beyond being Chinese disease to becoming global sickness as the 2019 novel coronavirus (2019-nCoV), officially named as Covid-19 by the World Health Organisation (WHO), has spread to 54 more countries apart from China sending alarming signal to public health authorities across the world.

BDSUNDAY search shows that a total of 83,386 (including 78,927 in Mainland China, Hong Kong, and Macau) confirmed cases of novel coronavirus infection including 2,858 deaths (with 2,794 in China, 26 in Iran, 17 in Italy, 13 in South Korea, four in Japan, two in France and one each in the Philippines and Taiwan) have been reported across the world as of 28 February 2020.

With the confirmation of the presence of this disease in Nigeria after an Italian national (a country that has become the worst affected in Europe with at least 650 cases and 15 deaths), tested positive to the 2019-nCoV, the country has also joined the list of countries with the virus.

“This situation is going to affect Nigerian Maritime industry seriously because close to 50 percent of imports into Nigeria especially machineries, raw materials and finished products come from China and other Far East Asian countries,” Tony Anakebe, managing director of Gold-Link Investment Ltd, a Lagos-based clearing and forwarding firm, said in a telephone interview with our correspondent.

According to him, importers no longer travel to China to buy goods while the people already there before the outbreak of the disease are currently stuck because airlines are also cancelling flights from China due to rejection in destination airports.

Anakebe, who stated that airlines flying international routes are becoming more conscious of the effected countries, also said that many foreign shipping lines are canceling sailings into ports in countries like China and others with high cases of the virus in Far East Asia and Europe.

“Currently, vessels with laden goods do not come regularly to Nigerian ports due to the Coronavirus outbreak in China. There is presently drastic reduction in movement of cargoes into Nigerian ports and as it is, we do not have an idea of what the situation would be in the next one or two months,” he said.

Anakebe however, expressed optimism that global as well as Nigerian economy would only get respite if the World Health Organisation (WHO) finds solution to the Coronavirus outbreak because “if it continues, it would definitely affect volume of businesses in countries like Nigeria”.

BDSUNDAY can recall that the government of People’s Republic of China had to extend the country’s New Year holiday over the outbreak of Coronavirus. As a result, major shipping liners and alliance slashed sailings by reporting blank sailing to ports in China due to shortage of cargoes following the closure of factories in China.

A blank or void sailing is a sailing that has been canceled by the carrier, which could mean that a vessel is skipping one port, or that the entire string (a set of ports served weekly by a carrier) is canceled.

Presently, reported Coronavirus blank sailings on the transpacific trade have reached 25, with carriers on the Asia-North America West Coast trade lane announcing 23 blank sailings.

For instance, liners such as Maersk, MSC and Hapag-Lloyd among others recently announced additional blank sailing to match reduced market demand over slow activity during post Chinese New Year holiday period, combined with the health situation in China.

Consequently, the Coronavirus caused some major disruptions at Chinese ports due to the lack of stevedores and truck drivers render services in the ports, thereby slowing down vessel turnaround times.

Analysts believed that the rapid and mass-cancellation of sailings to china is very likely to cause capacity shortages for shipping companies in the next two to three months.

According to Sea-Intelligence report, exports from China had been slashed by up to 350,000TEUs per week, costing the industry around US$350 million every week.

In his view, Jonathan Nicol, president of Shippers’ Association of Lagos State, confirmed in a telephone interview with BDSUNDAY that the outbreak of the virus will not only affect number of ship calls into Nigerian ports but also volume of import goods coming into the country.

“Certainly, it will affect volume of cargo after a few months from now. A lot of cargo had been exited before the outbreak of the virus in China, Europe, America and other Asian countries,” he stated.

According to him, Nigeria will start to notice the lull especially in regard to goods from China as from second quarter of the year because some of the cargoes from Far East Asia may be trapped due to closure of Ports of Origin or even transshipment Ports due to the dreaded virus.

“There would be less cargo, less volume and less revenue for government. It might even affect exports due to restrictions at the receiving destinations in India, Europe, China and some other ports,” Nicol added.

Meanwhile, Musa Abdullah, area controller of Customs, Tin-Can Island Port command, feared that the command might not meet its revenue targets for 2020 owing to the impact of Coronavirus which is already causing a decline in volume of imports.

“The outbreak of the coronavirus is yet to affect the revenue generation of Tin-Can command, but we have concerns that the declining cargo volume from China would ultimately hamper the revenue of the command,” said Abdullah at a recent sensitisation programme on Coronavirus held in Lagos.

It has been discovered that Europe, apart from Nigeria, has started experiencing the impact of the virus in its port business as analysts have predicted likely reduction of volume in Europe.

Richard Ballantyne, chief executive of British Ports Association (BPA) said: “We are beginning to see the impacts in terms of trade flows and there are figures which suggest that in the first three months of 2020, there will be six million fewer container shipping movements globally and also the China-Europe trade is expected to fall by 20 percent during this period.”

So far, in the United Kingdom, 7,690 people have been tested for the virus and of the 16 that have tested positive, eight are said to have so far been discharged from hospital. In China, where the virus originated, 78,497 cases have been reported, while 2,744 deaths have been recorded.

 

AMAKA ANAGOR-EWUZIE

 

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